Mounting unpaid loans could spell the downfall of satellite casino operator Macau Legend Development.
Macau Legend Development (MLD), a satellite casino operator, reported a 2024 loss of HK$667.23 million (£66.7 million/€80 million/$86 million), a sharp increase from HK$4.9 million in 2023.
In a 28 March filing, MLD disclosed net liabilities of HK$2.51 billion, including HK$2.41 billion in loans due within the next 12 months.
The company admitted that past breaches of "certain loan covenants" have left HK$2 billion in loans immediately callable by creditor banks. MLD further acknowledged that repaying these loans—along with the current HK$166.4 million in default—may not be feasible.
This financial strain raises “significant doubt” about the company’s ability to continue operating.
Kicked out of Cabo Verde
Founded in 1997, Macau Legend Development (MLD) operates Macau Fisherman’s Wharf, which it promotes as the “largest leisure and entertainment complex on the Macau Peninsula.” Its Legend Palace Hotel casino runs under the SJM Holdings concession.
Once aiming for global expansion, MLD shifted focus in 2023 when President and CEO Li Chu Kwan announced a withdrawal from overseas gaming projects to concentrate on Macau operations. In December that year, the company sold its Savan Legend casino in Laos for HK$303 million, citing “increasingly onerous restraints” that hindered profitability.
At the time, Macau Business suggested the sale could improve MLD’s liquidity, but financial relief was short-lived. Late in 2023, Cabo Verde ended its nearly decade-long partnership with MLD, accusing the company of repeatedly violating contractual obligations for a planned HK$2 billion casino project.
MLD had agreed in 2015 to develop a 160,000 sqm complex in Praia, the country’s capital. However, Macao News reported that construction never progressed beyond basic structural work.
In November 2024, Cabo Verde’s Prime Minister Ulisses Correia e Silva alleged MLD breached its contract by “transferring, without government authorization, more than 20% ownership of the project’s share capital.” He also pointed to “convictions… of shareholders, administrators, and others with responsibilities in MLD.”
Among those convicted was former MLD co-chairman and majority shareholder Levo Chan. In April 2023, a Macau court sentenced him to 14 years in prison for illegal gambling and money laundering. He was also ordered to repay HK$780 million to the Macau government and five of Macau’s Big 6 casino operators.
Survival depends on lenders
Macau Legend Development (MLD) now finds itself reliant on lender cooperation for survival. In a Friday filing, the company acknowledged that its future depends on its ability to secure sufficient financing and generate operational cash flow.
“This will only be possible if lending banks continue to provide support and refrain from demanding immediate repayment of outstanding borrowings due to non-compliance with loan covenants,” the company stated.
MLD is actively negotiating with banks to restructure its outstanding installments due in 2025. Additionally, it is seeking assurances from its controlling and substantial shareholders that they will not demand repayment of shareholder loans totaling HK$339.4 million.
To stabilize its financial position, the group is also implementing cost-cutting measures as part of a broader mitigation strategy.
